1. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1 MKTG Designed by Amy McGuire, B-books, Ltd. Prepared by Deborah Baker, Texas Christian University Lamb, Hair, McDaniel 2007-2008 Marketing Channels and Supply Chain Management 12 CHAPTER

2. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 2 Learning Outcomes Explain what a marketing channel is and why intermediaries are needed Define the types of channel intermediaries and describe their functions and activities Describe the channel structures for consumer and business products and discuss alternative channel arrangements LO 1 LO 2 LO 3

3. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 3 Learning Outcomes Define supply chain management and discuss its benefits Discuss the issues that influence channel strategy Explain channel leadership, conflict, and partnering Describe the logistical components of the supply chain LO 4 LO 5 LO 6 LO 7

4. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 4 Learning Outcomes Discuss new technology and emerging trends in supply chain management Discuss channels and distribution decisions in global markets LO 8 LO 9

5. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 5Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 5 Explain what a marketing channel is and why intermediaries are needed Marketing Channels LO 1

6. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 6 LO 1 Marketing Channels A set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer. Marketing Channels Marketing Channels

7. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 7 LO 1 Marketing Channels The connected chain of all the business entities, both internal and external to the company, that perform or support the logistics function. Supply Chain

8. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 8 LO 1 Marketing Channel Functions Specialization and division of labor Overcoming discrepancies Providing contact efficiency

9. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 9 LO 1 Specialization and Division of Labor  Creates greater efficiency  Provides lower costs  Achieves economies of scale  Aids producers who lack resources to market directly  Builds good relationships with customers

10. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 10 LO 1 Overcoming Discrepancies Discrepancy of Quantity Discrepancy of Quantity Discrepancy of Assortment Discrepancy of Assortment The difference between the amount of product produced and the amount an end user wants to buy. The difference between the amount of product produced and the amount an end user wants to buy. The lack of all the items a customer needs to receive full satisfaction from a product or products. The lack of all the items a customer needs to receive full satisfaction from a product or products.

11. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 11 LO 1 Overcoming Discrepancies Temporal Discrepancy Temporal Discrepancy Spatial Discrepancy Spatial Discrepancy A situation that occurs when a product is produced but a customer is not ready to buy it. A situation that occurs when a product is produced but a customer is not ready to buy it. The difference between the location of a producer and the location of widely scattered markets. The difference between the location of a producer and the location of widely scattered markets.

12. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 12 LO 1 Providing Contact Efficiency

13. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 13 REVIEW LEARNING OUTCOME LO 1 Marketing Channels Providing Specialization and Division of Labor Providing Specialization and Division of Labor Overcoming Discrepancies Providing Contact Efficiency Marketing Channel Supply Chain

14. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 14Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 14 Define the types of channel intermediaries and describe their functions and activities Channel Intermediaries LO 2

15. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 15Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 15 Intermediaries/Middlemen  A company or person that renders services related to the sale or purchase of a product as it flows from the producer to the consumer.  Disintermediation - process by which traditional intermediaries are eliminated as companies question the value added by layers in the distribution channel You can eliminate middlemen, but not the essential distribution activities they perform –Doesn’t necessarily reduce costs 15-15

16. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 16Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 16 Channel Intermediaries LO 2 Retailer A channel intermediary that sells mainly to customers. A channel intermediary that sells mainly to customers. Merchant Wholesaler Merchant Wholesaler An institution that buys goods from manufacturers, takes title to goods, stores them, and resells and ships them. Agents and Brokers Agents and Brokers Wholesaling intermediaries who facilitate the sale of a product by representing channel members.

17. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 17Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 17 Channel Intermediaries LO 2 Retailers Merchant Wholesalers Merchant Wholesalers Agents and Brokers Agents and Brokers Take Title to Goods Do NOT Take Title to Goods

18. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 18Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 18 Factors Suggesting Type of Wholesaling Intermediary to Use LO 2 Product characteristics Buyer considerations Market characteristics

19. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 19Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 19 Factors Suggesting Type of Wholesaling Intermediary to Use FactorMerchant Wholesalers Agents/ Brokers Nature of productStandardNonstandard, custom Technicality of productComplexSimple Product’s gross marginHighLow Frequency of orderingFrequentInfrequent Time between order and receipt of shipment Shorter lead timeLonger lead time Number of customersManyFew Concentration of customersDispersedConcentrated LO 2

20. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 20Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 20 Channel Functions Performed by Intermediaries LO 2 Contacting/Promotion Negotiating Risk Taking Researching Financing Physically distributing Storing Sorting Facilitating Functions Transactional Functions Logistical Functions Logistical Functions

21. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 21Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 21 LO 2 Logistics The process of strategically managing the efficient flow and storage of raw materials, in-process inventory, and finished goods from point of origin to point of consumption.

22. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 22 REVIEW LEARNING OUTCOME LO 2 Channel Intermediaries and Functions CHANNEL INTERMEDIARIES Retailers Wholesalers Agents and Brokers Retailers Wholesalers Agents and Brokers CHANNEL FUNCTIONS Transactional Logistical Facilitating Transactional Logistical Facilitating Perform

23. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 23Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 23 Describe the channel structures for consumer and business products and discuss alternative channel arrangements Channel Structures LO 3

24. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 24Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 24 Channels for Consumer Products LO 3 A distribution channel in which producers sell directly to consumers. Direct Channel Direct Channel

25. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 25Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 25 Channels for Consumer Products LO 3 Producer Consumers Retailers Wholesalers Agents or BrokersWholesalerChannelRetailerChannelDirectChannelAgent/BrokerChannel

26. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 26Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 26 Consumer Channels 15-26

27. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 27Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 27 Channels for Business Products LO 3 Producer Industrial User DirectChannel Producer Govt. Buyer DirectChannel Producer Industrial User Industrial Distributor Agents or Brokers Agents or Brokers Agent/BrokerChannel Industrial Distributor Agent/Broker Industrial Channel

28. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 28Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 28 B2B Channels 15-28

29. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 29Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 29 Business-to-Business Exchanges on the Internet LO 3 Agents link buyers and sellers Companies drop the intermediary from the supply chain “Private exchanges” with select suppliers automate the supply chain Online http://www.sherwinwilliams.com

30. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 30Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 30 Alternative Channel Arrangements LO 3 Multiple channels Strategic channel alliances Nontraditional channels

31. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 31 REVIEW LEARNING OUTCOME LO 3 Channel Structures CONSUMER CHANNELS  Direct  Retail  Wholesaler  Agent/broker  Direct  Retail  Wholesaler  Agent/broker BUSINESS CHANNELS  Direct  Industrial  Agent/broker  Agent/broker industrial  Direct  Industrial  Agent/broker  Agent/broker industrial ALTERNATIVE CHANNELS  Multiple  Nontraditional  Strategic alliances  Multiple  Nontraditional  Strategic alliances

32. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 32Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 32 Define supply chain management and discuss its benefits Supply Chain Management LO 4

33. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 33 LO 4 Supply Chain Management Supply Chain The supply chain includes all the firms that engage in activities that are necessary to convert raw materials into a good or service and put it in the hands of the consumer or business customer Supply chain management is the management of flows among the firms in a supply chain to maximize total profitability

34. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 34 15-34 Supply Chain

35. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 35 LO 4 Role of Supply Chain Management Physical flow process that engineers the movement of goods Physical flow process that engineers the movement of goods Communicator of customer demand from point of sale to supplier

36. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 36 LO 4 Responsibilities of Supply Chain Managers  Channel strategy decisions  Sourcing and procurement of raw materials  Production schedules  Order processing  Inventory management  Finished goods/supplies transportation and storage  Customer service coordination  Supply chain information flow management  Partner relationships

37. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 37 LO 4 The Supply Chain Process

38. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 38 LO 4 Benefits of Supply Chain Management Means of differentiation Greater supply chain flexibility Improved customer service Higher revenues Reduced costs

39. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 39 REVIEW LEARNING OUTCOME LO 4 Supply Chain Management

40. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 40Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 40 Discuss the issues that influence channel strategy Making Channel Strategy Decisions LO 5

41. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 41Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 41 Channel Strategy Decisions LO 5 Factors Affecting Channel Choice Factors Affecting Channel Choice Producer Factors Product Factors Market Factors Exclusive Distribution Selective Distribution Intensive Distribution Level of Distribution Intensity

42. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 42Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 42 Market Factors LO 5 Market Factors That Affect Channel Choices Market Factors That Affect Channel Choices Customer profiles Consumer or Industrial Customer Consumer or Industrial Customer Size of market Geographic location

43. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 43Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 43 Product Factors LO 5 Product Factors That Affect Channel Choices Product Factors That Affect Channel Choices Product Complexity Product Standardization Product Life Cycle Product Delicacy Product Price

44. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 44Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 44 Product Factors LO 5 Producer Factors That Affect Channel Choices Producer Factors That Affect Channel Choices Producer Resources Number of Product Lines Desire for Channel Control

45. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 45Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 45 Levels of Distribution Intensity LO 5 Intensive A form of distribution aimed at having a product available in every outlet A form of distribution aimed at having a product available in every outlet Selective A form of distribution achieved by screening dealers to eliminate all but a few in any single area A form of distribution achieved by screening dealers to eliminate all but a few in any single area Exclusive A form of distribution that established one or a few dealers within a given area A form of distribution that established one or a few dealers within a given area

46. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 46Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 46 Levels of Distribution Intensity LO 5 Intensive Achieve mass market selling. Convenience goods. Many Selective Exclusive Work with selected intermediaries. Shopping and some specialty goods. Work with single intermediary. Specialty goods and industrial equipment. Several One Intensity Level Objective Number of Intermediaries

47. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 47 REVIEW LEARNING OUTCOME LO 5 Issues Influencing Channel Strategy

48. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 48Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 48 Discuss the issues that influence channel strategy Managing Channel Relationships LO 6

49. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 49Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 49 Social Dimensions of Channels LO 6 Partnering Conflict Leadership Control Power

50. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 50Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 50 Channel Power, Control, and Leadership LO 6 Channel Power Channel Power A channel member’s capacity to control or influence the behavior of other channel members A channel member’s capacity to control or influence the behavior of other channel members Channel Control Channel Control A situation that occurs when one marketing channel member intentionally affects another member’s behavior A situation that occurs when one marketing channel member intentionally affects another member’s behavior Channel Leader A member of a marketing channel that exercises authority/power over the activities of other members A member of a marketing channel that exercises authority/power over the activities of other members

51. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 51Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 51 Channel Conflict and Partnering LO 6 Channel Conflict Channel Conflict A clash of goals and methods between distribution channel members Channel Partnering Channel Partnering The joint effort of all channel members to create a supply chain that serves customers and creates a competitive advantage

52. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 52Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 52 Channel Conflict Conflicts may occur if channel members:  Have conflicting goals  Fail to fulfill expectations of other channel members  Have ideological differences  Have different perceptions of reality LO 6

53. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 53Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 53 Channel Partnering LO 6 Supplier / Manufacturer Relationships Short-term Adversarial Independent Price important Long-term Cooperative Dependent Value-added services Number of Suppliers Many Few Transaction-Based Partnership-Based Information Sharing Minimal High Investment Required Minimal High

54. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 54 REVIEW LEARNING OUTCOME LO 6 Channel Leadership, Conflict, & Partnering Channel Relationship Synergy Channel Relationship Synergy Channel Conflict HorizontalVertical Channel Power, Control, Leadership Channel Partnering

55. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 55Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 55 Discuss global issues in services marketing Global Issues in Services Marketing LO 7

56. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 56Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 56 Logistical Components of the Supply Chain LO 7 Supply Chain Team Sourcing & Procurement Production Scheduling Order Processing Inventory Control Warehouse & Materials Handling Transportation Logistics Information System

57. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 57Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 57 Sourcing and Procurement  Plan purchasing strategies  Develop specifications  Select suppliers  Negotiate price and service levels  Reduce costs LO 7 The Role of Purchasing:

58. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 58Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 58 Production Scheduling LO 7 Push / Pull Strategy Traditional Focus Push Start of Production Manufacturing Inventory- Based Mass Production Customer Focus Pull Customer-Order Based Mass Customization

59. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 59Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 59 Just-in-Time Manufacturing LO 7 A process that redefines and simplifies manufacturing by reducing inventory levels and delivering raw materials just when they are needed on the production line. JIT

60. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 60Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 60 Benefits of JIT  Reduces raw material inventories  Shortens lead times  Creates better supplier relationships  Reduces production and storeroom costs  Reduces paperwork LO 7

61. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 61Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 61 JIT Requirements LO 7 Receive high-quality parts Meet supplier delivery commitments Have a crisis management plan

62. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 62Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 62 Order Processing LO 7 Information technology that replaces paper documents that accompany business transactions with electronic transmission of the information. Electronic Data Interchange http://www.walmartstores.com Online

63. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 63Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 63 Order Processing LO 7 A method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer’s or a customer’s demand. Inventory Control System Inventory Control System

64. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 64Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 64 Order Processing LO 7 Materials Requirement Planning (MRP) Materials Requirement Planning (MRP) An inventory control system that manages the replenishment of raw materials, supplies, and components from the supplier to the manufacturer. An inventory control system that manages the replenishment of raw materials, supplies, and components from the supplier to the manufacturer. Distribution Resource Planning (DRP) Distribution Resource Planning (DRP) An inventory control system that manages the replenishment of goods from the manufacturer to the final consumer. An inventory control system that manages the replenishment of goods from the manufacturer to the final consumer.

65. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 65Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 65 Materials Handling Functions LO 7 Receive goods into warehouse Dispatch the goods to temporary storage Recall, select, or pick the goods for shipment Identify, sort, and label goods

66. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 66Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 66 Transportation LO 7 Airways Water Pipelines Motor Carriers Railroads

67. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 67Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 67 Transportation Mode Choice LO 7  Cost  Transit time  Reliability  Capability  Accessibility  Traceability

68. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 68Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 68 Criteria for Ranking Modes of Transportation LO 7 Relative Cost Transit Time Reliability Capability Accessibility Traceability HighestLowest Air WaterPipeRailTruck WaterRailPipeTruckAir PipeTruckRailAirWater Truck RailTruckAirPipe RailAirWaterPipe AirTruckRailWaterPipe

69. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 69Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 69 Discuss new technology and emerging trends in supply chain management Trends in Supply Chain Management LO 8

70. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 70Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 70 Trends in Supply Chain Management LO 8 Electronic distribution Outsourcing of logistics functions Advanced computer technology

71. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 71Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 71 Advanced Computer Technology  Automatic identification systems - Bar coding - Radio frequency technology  Communications technology  Supply chain software systems LO 8

72. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 72Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 72 Outsourcing Logistics Functions  Reduce inventories  Locate stock at fewer plants and distribution centers  Provide same or better levels of service LO 8 Outsourcing Benefits

73. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 73Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 73 Discuss channels and distribution decisions in global markets Channels and Distribution Decisions for Global Markets Channels and Distribution Decisions for Global Markets LO 9

74. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 74Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 74 LO 9 Channels and Distribution Decisions for Global Markets Global Channel Development Global Channel Development Channel structure and type differ Gray marketing channels Global Supply Chain Management Awareness of trade legalities Transportation Issues

75. Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 75 REVIEW LEARNING OUTCOME LO 9 Global Market Channel & Distribution Decisions Distribute directly or through foreign partners Different channel structures than in domestic markets Illegitimate “gray” marketing channels Legal and infrastructure differences

76. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 76Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 76 Beyond the Book Channels and Distribution Decisions for Services NOTE: Supplemental content – not in book. Identify the special problems and opportunities associated with distribution in service organizations

77. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 77Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 77 Beyond the Book Channels and Distribution Decisions for Services NOTE: Supplemental content – not in book. Minimizing wait times Managing service capacity Improving service delivery

78. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 78Chapter 12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 78 Beyond the Book Distribution in Service Organizations NOTE: Supplemental content – not in book.